Hims & Hers short interest at critical levels after best weekly gain: report

 The short interest in Hims & Hers Health (NYSE:HIMS) has approached critical levels, financial data provider S3 Partners said on Friday after the telehealth firm's shares added ~45% this week, its best weekly gain, on the back of a partnership with obesity drugmaker Novo Nordisk (NVO).

HIMS’ rally followed more than a 50% selloff in the stock from a recent peak in February after the FDA declared an end to the shortage of Novo’s (NVO) GLP-1 therapy Wegovy, threatening the company’s compounding business targeting the popular weight loss drug.

HIMS “has seen sharp price swings and now faces a growing squeeze risk,” S3 Partners said, referring to a situation where short sellers, the group of investors who bet against a company’s share price, are forced to repurchase their shorted shares to exit their losing positions. A short squeeze can send the stock even higher, leading to even bigger losses for short sellers.

According to S3 Partners, Hims & Hers (NYSE:HIMS), which trades with over 33% of its floated stock shorted, indicated a squeeze score of 100 and a crowded score of 75, “meaning there is always the risk of a squeeze, which increases when the stock rises.”

Meanwhile, Wall Street has become increasingly skittish on HIMS' prospects in recent months, with the stock drawing two Sell ratings this year compared to no Sell ratings in October.

“With a highly volatile stock, rising short positions, and analyst sentiment turning bearish, HIMS represents a high-risk profile for both short and long positions,” S3 Partners wrote, adding, “The elevated squeeze score further complicates positioning.”

https://www.msn.com/en-us/money/markets/hims-hers-short-interest-at-critical-levels-after-best-weekly-gain-report/ar-AA1E6y0Z